New York Broker Gets New Opportunity to Prove that It Was Entitled to Commission in Central Florida Commercial Lease Renewal

The renewal of a lease on a commercial space in Polk County ultimately led to litigation between the property’s owners and the New York broker who allegedly brokered the renewal. The 3d District Court of Appeal ruled that the out-of-state broker’s assertions that it co-brokered the deal alongside a Florida broker were good enough to defeat the owners’ request for a summary judgment in the case.

The case centered around the leasing of a commercial property owned by GCCFC 2005-GG5 Route 33 Industrial, LLC and Miami Beach-based LNR Partners, LLC. The property, which was located in Lakeland, had a tenant. At some point, the tenant signed a lease extension. Phoenix Asset Management, LLC, which was doing business as Realta Group, negotiated that lease extension. After the property owners refused to pay it a commission on its brokerage of the lease extension, the broker sued the property owners.

During the discovery phase of the lawsuit, the property owners found out that the broker was licensed in New York but did not have a Florida license. The property owners then asked the trial court to issue a summary judgment in their favor. Section 475.41 of the Florida Statutes, they argued, prohibited the broker from collecting a commission on a Florida transaction because it did not have a Florida license.

Two days before the summary judgment hearing, the broker filed papers opposing the motion. The broker altered its previous statements that it was the sole broker of the extension. In an affidavit in support of its new position, a Realta Group vice-president asserted that it co-brokered the extension with First Market Properties, LLC. First Market, unlike Realta, did have a Florida license. The broker argued that the law allows non-licensed brokers to seek their share of commissions if they co-broker a transaction with a Florida-licensed broker.

The trial court nevertheless awarded summary judgment in the owners’ favor. The broker appealed and succeeded. The appeals court agreed that the law does allow for an exception to Section 475.41 when a Florida-licensed co-broker is involved. The involvement of the Florida broker satisfies the underlying policy goals of the statute, since the Florida broker “will be legally and professionally responsible” for both its actions and those of the non-licensed co-broker.

The appeals court sent the case back to the trial court to obtain more evidence about whether or not Realta and First Market truly worked together to secure the lease extension on GCCFC and LNR’s Lakeland property. The court warned both sides that financial penalties, such as an award of attorneys’ fees, would await any party who filed an affidavit in bad faith or solely in order to delay the outcome. In other words, if the trial court ultimately discovered that the broker’s last-minute change of its version of the facts, and claims of a co-brokering arrangement with First Market, were not made in good faith or were just a delaying tactic by the broker, the Florida court rules would require the trial court to order the broker to pay the owners’ attorneys’ fees.

For skillful and hardworking representation in your commercial property dispute, talk to the Florida real estate attorneys at Stok Folk + Kon. Our real estate attorneys have years of experience helping business clients like you effectively protect their interests.

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